Investment Q&A

Q: Please recommend about four to five covered call bond ETFs & is now a good time to invest in covered call bond ETFs. Thanks ... Cal

Q: Good evening,

I have a couple of questions regarding the following 5 ETF's. If it cost more than one credit that is ok. Just curious if you only own those 5 ETF's how diversified would you be? I understand that you be giving up some upside but from a diversification perspective do you have all your sectors covered?

For full disclosure I have 15 percent of my entire portfolio allocated to this 5 ETfs too add a little boost in income.

My last question regarding these 5 ETF's iss they all pay a distribution except SMAX and QMAX. SMAX and QMAX pay dividends according to my platform BMO investorline. Does that mean both these two are eligible for the dividend tax credit?

Thanks and have a great day.
Jimmy

Q: Is it possible to choose a favourite for a 1-1/2 to 2 year hold with the expectation of a reasonable yield while rates remain near current levels, and a capital gain as (if) they begin to fall?

HBND vs XBB or something preferable?

I'm assuming they all provide yield that will be treated as interest and not eligible divs. If so, preferred account type?

Thanks,

Q: Could you comment on the relatively new option-based US treasury ETFs HBND and HPYT. The yields have caught my attention, together with the underlying security of US treasuries and the possibility (?) that rates have peaked. Do you see these as being suitable up to around a 1.5% position in an RSP, and is there US tax withholding on the distribution in an RSP? How do these compare to TLTW (I would prefer to buy a CDN$ ETF rather than take the hit on conversion) Do you have a preference, and would you buy today? Note that I already hold about a 2.5% position in ZLC, which is up marginally.
Thank-you

Q: RE these 3 investment companies, which do you think is the best to invest in for high yield and modest growth: Harvest funds, Hamilton funds, Brompton funds. Thanks

Q: Hbnd has a yield of .88% though it pays distribution of .13 cents monthly.Why is that-they do this with several enhanced etfs

Q: Recently I asked a question on HBND. Could 5i give me a similar analysis on HPYT ? As well as comparison of the different structures between the two . The only one I am aware of is the 50% position of HBND that is not covered calls . Not sure what the situation is with HYPT ..... The yield on the two is considerably different with the former yielding 10% and the latter 15% ...... Please compare what you would suspect would happen differently with each under rising/stagnant/falling interest rates ?..... Thanks Garth

Q: hello 5i:
we're interested in starting a small position in HBND.
First, can you clarify something.
You said, in reply to a previous question: "But if rates stagnate or decline, and for an investor seeking income, the yield on this ETF may come under pressure, but its unit price can see capital appreciation. "
Are you saying here, that if (for example), the 10 year Treasury were to fall from 4.8ish to 2.4ish, that HBND would then yield around 5%? Along with a capital gain?

Second: would the decrease in HBNDs yield matter that much, as Treasuries and GICs, etc, would have a similar decrease in rates (a 1 year GIC paying around 2.5% vs a current rate of around 5%?

Third: isn't a stagnant yield almost ideal for a covered call bond, as nothing is changing, other than the seller continuing to collect the premiums from the sale of the covered calls?
thanks
Paul L

Q: With U.S. Treasury yields on the rise, is this a good time to buy this U.S Treasury focused ETF? Also, looking forward, and assuming a higher for longer scenario for interest rates, that are at a peak now, and will stay there for a couple of years, what would your outlook be for this ETF? Is the yield sustainable at a targeted 10%, or might it rise in the short term? Thanks. Will

Q: MY ERROR ! I asked the question ... "I have recently come across some US covered call ETF's offering +10% returns on ES Bonds. Sorry, don't have the ticker. They are on streaming platforms and flash by before I can write then down. Can you comment on the danger of such an investment, the stability of the dividend as interest rates are certain to shift. Thanks ! " BUT, I meant to type US (not ES). SORRY. Please deduct a few additional questions due to my typo.

Q: In your answer to my previous question on HBND you said that a 10% allocation would be good. Did you mean 10% of the whole portfolio or 10% of the bond portfolio (so example 10% of a30% bond allocation would be only 3%).

Q: Could I have 5i's analysis and recommendations on Hamilton's new ETF HBND ? A 10% yield on US treasuries seems like a pretty secure investment ...... Please assess versus other bond ETF's available on the market as the fixed income side of a portfolio ?.....And from a second point of view on whether it also might be a pretty safe place to park cash as well ? Can't really see a whole lot of volatility with US Treasuries but I know very little about the bond market .....